Jock Finlayson is executive vice president and chief policy officer of the Business Council of BC. (Submitted)

COLUMN: A mix of good and bad news about B.C.’s economy

Jock Finlayson is executive vice president and chief policy officer of the Business Council of BC

Amid an escalating U.S.-China trade war, a decelerating global economy, and a steadily diminishing B.C. budget surplus, the provincial government recently published its revised economic outlook. As usual, the picture is mixed, although with more downside than upside risks.

Drawing on the government’s updated forecast and other recent data, below I list a few positive features of today’s B.C. economy. A follow-up column will look at areas where the economic news is far less cheerful.

In B.C., the biggest driver of economic growth tends to be the expanding population. More people mean a greater demand for goods, services and housing. Population growth in B.C. is running at 1.4 per cent, well above the figure for Canada. That translates into another 65,000 residents every year. The bulk of this reflects international immigration, which stands at around 45,000 annually. On top of that are thousands more non-permanent immigrants who are in the province on work and study visas.

There is a caveat. What ultimately matters for prosperity is how much GDP the economy produces relative to the size of the population. Adding more warm bodies doesn’t do much to boost prosperity, if GDP and real incomes are barely growing when measured on a per person basis – as is presently the case for Canada.

In the past two years, B.C. has experienced slight gains in both per capita GDP and average incomes, adjusted for inflation. But the gains are considerably smaller than the numbers for total GDP growth would suggest.

A notable bright spot for B.C. is non-residential construction. The value of non-residential building permits hit a record $5.1 billion last year, and a further sizable jump is on track for 2019.

Some examples of significant construction investments are LNG Canada’s huge new project in Kitimat; B.C. Hydro’s Site C dam and reservoir; the expansion and rebuilding of hospitals in several communities; major capital projects underway at the Vancouver and Prince Rupert ports and Vancouver International Airport; and new investments in transportation infrastructure.

At the same time, B.C.’s job market has also been healthy. So far in 2019, employment has been growing at an annualized rate of more than three per cent. At 4.4 per cent, B.C.’s unemployment rate is the lowest in the country. More recently, there has been an easing in the pace of job creation. This may signal weaker economic conditions going forward.

Finally, business has been brisk in several industry sectors.

Tourism, which accounts for almost six per cent of GDP, has been booming, though there are signs this year that that activity is levelling off. As economic growth slows in the U.S., China and Europe, B.C. tourism operators may have less reason to smile.

The advanced technology sector (representing seven per cent of provincial GDP and 110,000 direct jobs) is growing and continues to show strength in several sub-sectors, notably clean technology, digital services and other IT-producing industries.

The film and television industry is another growth star, with revenues expected to reach $4 billion in 2019. It’s operating at full capacity, which may limit the prospects for further growth in the near-term.

Agri-food is another growth engine. The value of B.C. agri-food exports has increased sharply in recent years. And the medium-term outlook is positive, notwithstanding restrictions on imports of some Canadian agricultural commodities recently imposed by China.

Add it all up, and there is evidence that the province’s financial health will continue to chug along even as the global backdrop becomes less favourable. But B.C. faces several home-grown problems that are weighing on the economy. I will explore some of these in my next column.

Jock Finlayson is executive vice president and chief policy officer of the Business Council of British Columbia

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Councillor Neil Krog wanted to ask Grand Forks voters at December’s byelection if they’d support a year-round homeless shelter and BC Housing’s proposed supportive housing facility. Photo: Laurie Tritschler
No referendum on homelessness solutions after Grand Forks council meeting

The motion by Councillor Neil Krog failed on a tie vote Monday, Oct. 19

A health-care worker prepares to swab a man at a walk-in COVID-19 test clinic in Montreal North, Sunday, May 10, 2020, as the COVID-19 pandemic continues in Canada and around the world. (THE CANADIAN PRESS/Graham Hughes)
Interior Health records 21 new COVID-19 cases over the weekend

Thirty-six cases remain active; two people are in the hospital, one of whom is in intensive care

Ski touring operators are changing how they plan to operate due to the pandemic. Photo: Curtis Cunningham photo
With winter looming, West Kootenay ski tour operators say they’ve adapted

COVID-19 has meant businesses are changing how the upcoming season will run

Advance polls are now open for the 2020 B.C. election. (Black Press File)
BC Votes 2020: Meet your Boundary Similkameen candidates

A round up of candidates’ bios, responses to our questions, and more

Rob Louie has formed a non-profit organization he says will assist band members in legal disputes with their councils. Photo: Submitted
UPDATED: Indigenous legal organization created to help band members keep councils accountable

Rob Louie has created Band Members Alliance and Advocacy Association of Canada

FILE – Provincial health officer Dr. Bonnie Henry answers questions during a press conference to update on the province’s fall pandemic preparedness plan from the press theatre at Legislature in Victoria, Wednesday, Sept. 9, 2020. THE CANADIAN PRESS/Chad Hipolito
B.C. sees record-breaking daily COVID infections with 499 new cases over weekend

Two people, both in the Lower Mainland, died due to the virus over the weekend

Investigators work at the Sagmoen farm in Silver Creek. - Image credit: Observer file photo.
Sex workers allegedly called to farm of Okanagan man convicted of assault, RCMP investigating

Curtis Sagmoen, convicted in relation to assault of sex trade workers, is prohibited from soliciting escorts

(Black Press Media files)
Early voters more likely to favour NDP, but overall B.C. election is tightening: poll

According to Elections BC, 383,477 people cast a ballot during advanced voting days

(Pixabay)
Wave of racist emails ‘unleashed’ on B.C. researchers investigating racism in health care

The team has received close to 600 calls and emails since the investigation started in July

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

With local MLA Adam Olsen looking on, BC Greens leader Sonia Furstenau said a Green government would convert BC Ferries into a Crown corporation Wolf Depner/News Staff)
Green leader Sonia Furstenau promises to convert BC Ferries back into Crown corporation

Promise comes Monday afternoon with five days left in campaign

A passer-by walks past a COVID-19 testing clinic in Montreal, Friday, Oct. 16, 2020. THE CANADIAN PRESS/Ryan Remiorz
Canada ‘yet to see’ deaths due to recent COVID surge as cases hit 200,000

Much of the increase in case numbers can be attributed to Ontario and Quebec

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Police confirm human remains were found in a recycling bin in Vancouver on Oct. 18, 2020. (Black Press Media file photo)
Human remains found in recycling bin floating near Vancouver beach

Police asking nearby residents to see if their recycling bin has gone missing

Most Read